GST Council to hold first physical meeting since pandemic
The GST Council will hold its first physical meeting on Friday since the outbreak of the pandemic. Finance minister Nirmala Sitharaman will chair the 45th meeting in Lucknow.
The last meeting of the council was held virtually on June 12, where it was decided to reduce the rates on Covid-19 essentials including medicines, oxygen and related medical equipment, Covid testing kits and related materials till September.
On Friday, the council is widely expected to take up the extension of compensation cess for states beyond 2022 with most states likely to pitch for a five-year extension, amid several fiscal constraints.
At its meeting (the 42nd) in October 2020, the council had recommended the extension of compensation cess beyond June 2022 without specifying a time period.
With collections affected by the pandemic, the Centre in October — based on the deliberations of the council — decided to borrow Rs 1.1 lakh crore under a special window and passed it on to the states to meet the shortfall in compensation
At the 43rd council meeting in May, it was decided that the Centre would borrow Rs 1.59 lakh crore from the market through a special window and pass it to the states as loan in tranches. The government said it had already released Rs 75,000 crore by July 15.
The meeting may also deliberate on extending the lower GST rates on specified items being used in Covid-19 relief beyond September 30.
With instances of fake input tax credit claims on the rise, the council is expected to announce measures to tighten the anti evasion policies.
The meeting may also consider the Group of Ministers’ report to allow special cess on pharma and electricity in Sikkim. The GoM is in favour of a 1 per cent cess on intra-state supply of pharmaceutical items for a period of two years up to 2022-23.
According to a report of CNBC TV18, the council may also announce a common electronic portal where one can register, file returns and claim input tax credit.
SC on refund
The Supreme Court on Monday allowed the plea of the Centre by holding that goods and services under the CGST law and rules cannot be treated on a par for the purposes of refund of unutilised input tax credit (ITC), saying there is “no constitutional entitlement to seek a refund”.
The top court upheld the validity of Section 54(3) of the Central Goods and Service Tax (CGST) Act, which deals with refund of unutilised ITC, saying the judiciary should not enter into the “legislative discretion of Parliament to fashion the rate of tax, concessions and exemptions” .
GST revenue collected in August 2021 was Rs 1.12 lakh crore, up 30 per cent compared with August 2020. The revenue collected in July 2021 was Rs 1.16 lakh crore. According to government data, GST collection was above Rs 1 lakh crore for nine months in a row before dropping below Rs 1 lakh crore in June 2021 due to the second wave of Covid.
In August, Central GST was Rs 20,522 crore, state GST, Rs 26,605 crore and integrated GST Rs 56,247 crore, including Rs 26,884 crore collected on import of goods. The cess collected was is Rs 8,646 crore, including Rs 646 crore collected on import of goods.